Congress to consider Isaac relief

Published: Tuesday, February 5, 2013 at 5:42 p.m.

Last Modified: Tuesday, February 5, 2013 at 5:42 p.m.

BATON ROUGE — Individuals and businesses still recovering from Hurricane Isaac may be eligible for additional tax relief if Congress approves legislation filed by a pair of Louisiana lawmakers.

Rep. Bill Cassidy, R-Baton Rouge, originally introduced the Investment Saving Access After Catastrophe Act, or ISAAC Act, during the last Congress.

It was stalled during the final weeks of 2012 and overshadowed by the “fiscal cliff” debate and the aftermath of Hurricane Sandy, which devastated portions of the New Jersey shoreline and the surrounding region in late October.

Sen. David Vitter, a Metairie Republican, introduced the same legislation in the Senate to alter the tax code for hurricane victims last year, but like Cassidy's version, it failed to gain traction.

The new Congress, however, offers new opportunities, and both men have reintroduced the proposed act.

“This acknowledges that even though fewer were affected by Isaac than recent hurricanes, those affected are just as important and deserve federal assistance,” Cassidy said. “This bill makes changes to the tax code to give those affected another tool to aid their recovery at no cost to taxpayers.”

For starters, families and individuals would be able to deduct more of their unreimbursed losses under the tax plan.

They would likewise be able to withdraw money from retirement accounts — money that would be tax free and not subject to contribution limits if paid back within three years. There would be a cap, however, of $100,000.

“Dealing with a natural disaster is incredibly stressful for Louisiana families, and our bill helps provide a little relief from the IRS,” Vitter said. “By providing tax benefits to individuals and small businesses who suffered losses, we can help them get back on their feet in a budget neutral manner.”

By increasing the federal carryback period from three to five years, the bill would permit small businesses and farms to deduct more of their profit losses. Generally, a carryback refers to a practice where losses are applied to previous years of income in an effort to lessen related tax liability.

The bill would further eliminate certain limitations on unreimbursed losses and the alternative tax net operating loss deduction.

If approved by Congress, the resulting act would charge the White House's Office of Management and Budget with identifying “appropriated, discretionary, unexpired and unobligated” federal money to underwrite the tax relief program.

Cassidy, who represents northern Terrebonne and Lafourche parishes, said the bill would make relief available to Louisiana and Mississippi residents who sustained damages from Isaac and lived in federally declared disaster areas.

Locally, that means there will be interest. When the Federal Emergency Management Agency opened up registration for individual assistance after Hurricane Isaac, there were more than 3,800 applications filed in Terrebonne and roughly 4,300 in Lafourche.

Aside from Terrebonne and Lafourche, Louisiana's federally declared disaster areas were Allen, Ascension, Assumption, East Baton Rouge, East Feliciana, Iberville, Jefferson, Livingston, Morehouse, Orleans, Plaquemines, Pointe Coupee, St. Bernard, St. Charles, St. Helena, St. James, St. John, St. Martin, St. Mary, St. Tammany, Tangipahoa, Washington, West Baton Rouge and West Feliciana parishes.

In the House, Cassidy's bill is co-sponsored by Rep. Steven Palazzo, a fellow Republican from Mississippi.

<p>BATON ROUGE — Individuals and businesses still recovering from Hurricane Isaac may be eligible for additional tax relief if Congress approves legislation filed by a pair of Louisiana lawmakers. </p><p>Rep. Bill Cassidy, R-Baton Rouge, originally introduced the Investment Saving Access After Catastrophe Act, or ISAAC Act, during the last Congress. </p><p>It was stalled during the final weeks of 2012 and overshadowed by the “fiscal cliff” debate and the aftermath of Hurricane Sandy, which devastated portions of the New Jersey shoreline and the surrounding region in late October. </p><p>Hurricane Isaac, meanwhile, pushed ashore in the waning days of August, piling 11 feet of surge atop Shell Beach and initially fueling 85 mph gusts out of the Grand Isle area. </p><p>Sen. David Vitter, a Metairie Republican, introduced the same legislation in the Senate to alter the tax code for hurricane victims last year, but like Cassidy's version, it failed to gain traction. </p><p>The new Congress, however, offers new opportunities, and both men have reintroduced the proposed act. </p><p>“This acknowledges that even though fewer were affected by Isaac than recent hurricanes, those affected are just as important and deserve federal assistance,” Cassidy said. “This bill makes changes to the tax code to give those affected another tool to aid their recovery at no cost to taxpayers.”</p><p>For starters, families and individuals would be able to deduct more of their unreimbursed losses under the tax plan.</p><p>They would likewise be able to withdraw money from retirement accounts — money that would be tax free and not subject to contribution limits if paid back within three years. There would be a cap, however, of $100,000.</p><p>“Dealing with a natural disaster is incredibly stressful for Louisiana families, and our bill helps provide a little relief from the IRS,” Vitter said. “By providing tax benefits to individuals and small businesses who suffered losses, we can help them get back on their feet in a budget neutral manner.”</p><p>By increasing the federal carryback period from three to five years, the bill would permit small businesses and farms to deduct more of their profit losses. Generally, a carryback refers to a practice where losses are applied to previous years of income in an effort to lessen related tax liability. </p><p>The bill would further eliminate certain limitations on unreimbursed losses and the alternative tax net operating loss deduction. </p><p>If approved by Congress, the resulting act would charge the White House's Office of Management and Budget with identifying “appropriated, discretionary, unexpired and unobligated” federal money to underwrite the tax relief program. </p><p>Cassidy, who represents northern Terrebonne and Lafourche parishes, said the bill would make relief available to Louisiana and Mississippi residents who sustained damages from Isaac and lived in federally declared disaster areas. </p><p>Locally, that means there will be interest. When the Federal Emergency Management Agency opened up registration for individual assistance after Hurricane Isaac, there were more than 3,800 applications filed in Terrebonne and roughly 4,300 in Lafourche. </p><p>Aside from Terrebonne and Lafourche, Louisiana's federally declared disaster areas were Allen, Ascension, Assumption, East Baton Rouge, East Feliciana, Iberville, Jefferson, Livingston, Morehouse, Orleans, Plaquemines, Pointe Coupee, St. Bernard, St. Charles, St. Helena, St. James, St. John, St. Martin, St. Mary, St. Tammany, Tangipahoa, Washington, West Baton Rouge and West Feliciana parishes.</p><p>In the House, Cassidy's bill is co-sponsored by Rep. Steven Palazzo, a fellow Republican from Mississippi.</p><p>Jeremy Alford can be reached at jeremy@jeremyalford.com.</p>